GENERAL SECRETARY PAK-SAUDI FERILIZER Versus PAK-SAUDI FERTILIZER LIMITED MIRPUR MATHELO DISTRICT SUKKUR

ORDER

ATAULLAH SAJJAD (CHAIRMAN).‑‑ This appeal is directed against the order dated 30‑4‑1992 passed by the learned Member sitting at Karachi whereby he vacated ad interim order dated 15‑3‑1992 by which respondents Nos.l and 2 were ordered to make payment of wages to workers as per settlement dated 7‑10‑1991, lift lock‑out of workers and refrain from termination, dismissal, removal and lock‑out of workers/members of the union.

2. The facts as alleged by the appellant in the petition and a rather lengthy memo of appeal are these: ‑

3. Respondent No.l is a State‑owned Industry dealing in manufacturing of fertilizers. It runs the Departments of bagiag, loading, stitching and insertion through a Contractor in which departments 362 workers are employed. It has been stated before us that the mores of the Contractors have been changing during the last ten years but same persons and same number of workers continued to be employed in these departments. Muhammad Aslam Khan, the Managing Partner of Workman Associates respondent No.2 is stated to be an employee of respondent No.l and had been consistently figuring in almost all the contracts, which were concluded different times during all these years. Ali Murad and Muhammad Hanif who represent Workman and Co. Respondent No3 are said to be the employers of aforesaid Muhammad Aslam Khan. Originally the workers were represented by Pak‑Saudi Limited Employees Union, which functioned as C.BA. in older departments also and settlement dated 3‑5‑1984 which was effective fpm 1‑8‑1983 (Exh. A/3) on the record of the appeal file was entered into by tic above union and Shahbaz and Company on whose behalf Aslam Khan, Ali Murad and Muhammad Hanif aforementioned, fixed their signatures: Late on the appellant union was formed and was registered as C.BA. vide Certificate of the Registration dated 21‑3‑1985. The workers belonging to the appellant union are engaged in insertion of polythene bags, stitching of bags, filling of Urea into bags and then loading and cleaning. The process is carried out y machines and partly by manual labour. The machinery, the bags, the Lien and the Urea are the property of the respondent No.l the Pak‑Saudi Fertilizers. Limited. It has so happened that some Contractors left without completing the period of contract but the same workers continued working throughout these years. The Union entered into a settlement (Exh. A/9 on the appeal file) with Messrs M.B.K Jalbani Limited on 19‑8‑1989 and this was to commence from January, 1989 and was to continue for two years till January, 1991. Jalbani & Co., however, left and Aslam Khan, the Managing Partner ‑of Workman Associates respondent No. 2 entered the field and took the place of Jalbani & Co. as a Contractor. The same workers continued to work under the new Contractor. An Agreement A/10 was entered into between respondents 1 and 2, on 22‑10‑1989, which was to last for two years till 22‑9‑1991. Thereafter, the appellant union served respondent No.2 with certain demands for increase in their emoluments and respondent No. 1 agreed with Respondent No. 2 to an increase of Rs. 2 per ton. The above agreement was notified by A/11 and clause 11.1 of the principle contract was amended and the period of the operation of agreement A/10 was extended to 27‑1‑1993. Respondent No.2 on his part came to a settlement with appellants on 7‑10‑1991 for two years which was made retrospectively effective from 28‑1‑1991 and was to expire on 27‑1‑1993.

4. It is the case of the appellant that when the Government embarked on privatization of State‑owned Industries Muhammad Rafiq, Managing Director and Riaz Hussain, Manager of respondent No. 1 came out with a bid but the Appellant Union opposed his move and demanded that in the transaction of privatization the same benefits should be extended to the members of the appellants which were to be given to other employees of the Company. This annoyed Mr. Muhammad Rafiq and his companies with the result that they embarked on a campaign of victimisation of the union and reduction in their emoluments. The union resisted this pressure but Muhammad Rafiq and his supporters were relentlessly after the appellant‑union. A notice A/16 was displayed in the factory on 20‑2‑1992 that the Bagging Plant shall remain closed for repairs on 21‑2‑1992. On 22‑2‑1992 when the workers went to perform their duties, 193 out of them were locked out which number was more than 50 per cent of the total strength employed on the job of stitching bagging, filling and cleaning etc. Telegram Exh. A/17 was sent to the President, Prime Minister and Labour Minister on 23‑2‑1992, telegram A/18 was sent to the Member, National Industrial Relations Commission, Karachi on 26‑2‑1992 and Telegram A/19 was addressed to the Commissioner, Sukkur Division by the General Secretary protesting against illegal lock‑out of workers. It appears from the record that Assistant Director, Labour had moved an application under section 46‑A of the Industrial Relations Ordinance, 1969 before the Labour Court Sindh VII on the information furnished by Muhammad Aslam Khan. The Court passed an order on 8‑3‑1992 Exh. A/20 on the appeal file. This order shows that Muhammad Aslam Khan had informed the Labour Department that services of a number of workers had been terminated on account of termination of the contract by respondent No.l but the other workers has struck work and had gone on strike. The Court disposed of the matter by giving certain directions to the parties.

5. We may observe here that the contract was actually terminated on 8‑3‑1992 by letter A/22 and the plea of termination of contract taken by respondent No.2 before the Directorate of Labour on 20‑2‑1992 does not get support from the record. It appears to us that the respondents 1 and 2 have not been very sure as to which stand they should take about the ouster of 193 workers on 22‑2‑1992. In the parawise comments filed by respondent No. 2 filed before the learned Member, there is no mention of the rescission of the contract on 20‑2‑1992 and it is mentioned in para 18 that the workers had gone on strike on 22‑2‑1992 without mentioning that it was consequent upon cancellation of the contract on the part of respondent No. 1. We have seen that before the Directorate of Labour (as would appear from the judgment of Sindh Labour Court No. VII, Sukkur (A/20) and from the report of Muhammad Uris Soomro, Assistant Director dated 28‑3‑1992), the stand of respondent Not was that 193 workers stood retrenched on 20‑2‑1992 on account of rescission of the contract, which plea was not canvassed even before us during the hearing of the appeal. It is therefore, apparent that a number of workers were sought to be shed-off on or about 20‑2‑1992 for a reason, which had no basis in fact.

6. On 8‑3‑1992 respondent No. 1 issued letter A/22 to respondent No. 2 termination the contract (A/10), dated 22‑10‑1989. It is alleged that on the same day the President of the Union and another office‑bearer were abducted at 2‑00 P.M. and were kept in confinement and later on three others were also taken away. Telegram (Fxh. A/21) was sent on the same day by Abdul Haq, General Secretary of the Union to the Chief Minister of Sindh, Minister of Labour Welfare, Sindh and Inspector‑General of Police, Sindh, complaining against the illegal confinement of the office‑bearers with a view to coerce them into signing a new settlement. A new settlement (Copy Exh. A/23) is said to have been concluded on 9‑3‑1992 between respondent No. 3 M/s. Workman & Co. and the office‑bearers of the trade union. According to this agreement, a reduction of Rs.700 per month was made in the emoluments of each worker and 112 workers were dropped. The agreement was to last from 8‑3‑1992 till 27‑1‑1993. The signatories on behalf of party No. 1 i.e. M/s. Workman & Co. are the aforementioned Ali Murad and Muhammad Hanif while the names of eight representatives of the Union have been mentioned in the agreement but signatures of the General Secretary, Joint Secretary and Office Secretary are wanting on this document. The document is witnessed by Peer Ijaz Hussain Jillani Peer of Sui Sharif Deputy Director, Labour, Sukkur, Assistant Director Labour, Muhammad Amin Soomro, President, Pak‑Saudi Labour Union and Riaz Hussain, Senior Manager, L&CA of the Company and there is an attestation at the bottom by Assistant Commissioner and Sub‑Divisional Magistrate that the agreement has been entered in his presence.

7. A letter (A/24) was addressed on 12‑3‑1992 to the President of Pakistan, Prime Minister, Minister for Labour and other authorities, a list whereof is at page 217 of the file, by the President, Senior Vice‑President, Vice‑President, Treasurer and Information Secretary, all signatories to the disputed settlement dated 9‑3‑1992, stating that the office‑bearers of the Union were abducted on 8‑3‑1992 and were coerced into signing agreement which aimed at reduction of Rs. 700 per month in the emoluments of each worker of the union and termination of the services of 112 workers. A prayer was made that the settlement of 7‑10‑1991 between Respondent No. 2 and the union be restored and 112 workers be reinstated.

8. The appellants filed petition No. 24(47)/92‑K alongwith a petition under Regulation 32(2)(c) of the NIRC (Procedure & Functions) Regulations, 1973 before the learned Member of this Commission at Karachi, on the allegations that the workers belonging to the appellant union were, in fact, the employees of respondent No. 1 and that the contract system was a facade and that the contract between respondents Nos. 1 and 2 in respect of employment of the Labour in departments of bagging and stitching had been cancelled by collusion and in any case the settlement Exh. A/23 dated 9 3‑1992 had been obtained under coercion and by illegal means and the union was not bound by it. The learned Member passed an ad, interim order on 15‑3‑1992 directing the respondents to make payment of wages and other benefits to workers as per settlement dated 7‑10‑1991 (A/12), lift lockout of workers, refrain from termination, dismissal, removal and lock‑out of workers/members of the union and alteration of terms and working conditions of the workers. This order was reconsidered on 30‑4‑1992 after notice to the respondents and the learned Member recalled the ad interim order stating that admittedly the union had signed an agreement with Workman & Co. on 9‑3‑1992 and the contract of Workman Associates was cancelled by respondent No. 1 and it was later on awarded to Workman & Co. respondent No3. The learned Member further observed that since the applicant had executed settlement with Workman & Co, the Workman Associates do not appear to be responsible to make payment to the applicants, nor M/s. Pak‑Saudi Fertilizers kited appears to be responsible to make payment of wages to them, there being no relationship of employer and employees between them. As to the allegation of applicant that the agreement was executed under duress, the learned Member observed that this had to be proved by evidence and further noticed that the agreement had been signed not only by majority of the office‑bearers of the union but was attested by SDM, Mirpur Mathelo and Deputy Director, Labour, Sukkur and President; Pak‑Saudi Fertilizer Employees Union. He was of the opinion that prima facie that agreement did not appear to have been obtained by or under force. He rejected the argument that the Workman Associates and Workman & Co. were one and the same Company with only change of names of the Company.

9. The learned Counsel for the appellant submitted before us that a request had been made to the learned Member to call for the report of the Assistant Director, Labour Welfare, Hyderabad, who had visited the factory on 25‑3‑1992 in order to investigate the allegations that the agreement of 9‑3‑1992 had been obtained under duress and by putting pressure on some of the office- bearers of the union through various channels but the impugned order was passed without waiting for that report. We asked for a copy of the report and it is now on the record.

10. Support is forthcoming for the case of the appellants as put before us also from this report which comes from an official source. Mr. Muhammad Uris Soomro, Assistant Director Labour (Inspection) visited the Pak‑Saudi Fertilizers Factory on 25‑3‑1992 and conducted an enquiry into the matter. It came to his notice that on 20‑2‑1992, the management issued a letter to M/s. Workman Associates saying that under clause (3) of Letter of intent read with clause 112 of the Contract agreement dated 22‑10‑1989, they had decided to eliminate and withdraw filling and stitching activities with immediate effect from the contract in order to execute the same through adjustment on their own existing staff: Again on 8‑3‑1992 the Management informed the Workman Associates that this contract with the Management dated 22‑10‑1989 for insertion and loading was terminated with immediate effect. In para 3 of the report it is mentioned that the agreement dated 9‑3‑1992 between the Representatives of the Workman & Co. and some of the office‑bearers of the union, shows a decrease in the employments of the workers and by operations thereof 113 workers were locked‑out. The report also refers to the fact that actually an agreement between the Workman & Co. and the Management was concluded on 11‑3‑1992 but the impugned agreement between Workman & Company and office‑bearers of the appellant‑Union was concluded on 9 3‑1992 and according to the Reporting Officer, it is not explained how the agreement dated 9‑3‑1992 came into being when there was no privity of contract on that date between the Contractor and the Management. According to the Reporting Officer the Factory Management and the Contractor Muhammad Aslam Khan had taken shelter behind the influential persons of the area to hide and implement their illegal actions. It is further pointed out that appointment letters showing the terms and conditions of the workers had not been issued to the employees by the Establishment or the Contractor concerned, in violation of the Factories Act, 1934. The report also shows that about 100 workers have been newly employed for filing of the Urea in the bags etc. at a low rate. The Reporting Officer also supported the plea of the appellants that the Managing Director of the Factory was trying to purchase the Mills and the present dispute was created so that no other party may come forward to make a bid for the purchase of the factory. The Reporting Officer observed;

"On the other hand Management through their pressure, harassment and illegal tactics desire to sweep the contract labour before purchase or they may be forced‑to work on wages whatever may be given to them."

11. The Officer suggested that team inspection of the factory may be carried out immediately and necessary action for violation of labour enactments may be taken against the Management and the contractor or the factory who were committing serious violations of law.

12. It may be stated here that the appellants had moved the learned Single Member to send for this report and the learned Member passed an order calling for the report which order was not complied with by the Staff and the report was not before him when he passed the impugned order. In any case, we have now the advantage of perusing this report which carries its own value.

13. We may also mention here that in the Criminal proceedings initiated in Complaint No. 4(20) 92‑K, the learned Member appears to have been impressed by the case of the complainant Abdul Haq, General Secretary of the appellant‑Union and observed as under: ‑

"10. Strangely this new settlement contains terms safeguarding the interest of the outgoing contractor. In para No.6 of the new agreement it is mentioned that previous agreement dated 7‑10‑1991 was voluntarily cancelled and that cases between the previous contractor and the union would be withdrawn. If the previous contractor had washed his hands of entire matter why this clause was inserted in the fresh agreement for his protection. It is also a matter for his protection. It is also a matter for serious consideration why important officers of the union such as General Secretary and Joint Secretary refrained from signing the agreement. Both these officers also alleged to have sent telegrams against this high handedness to various authorities.

11. Assuming that the agreement was not executed under coercion as alleged in the petition, the manner in which the pressure was built, to bear upon officers of the union posing a serious threat to their jobs would indicate that the agreement was not executed amicably by free volition of officers of the union. It is very difficult to conceive that the workers would willingly agree to heavily slash down their salaries and place such an agreement before the new contractor in a silver plate."

He found a prima facie case against the accused, Rafiq M. Chaudhry, Managing Director, Pak‑Saudi Fertilizer Ltd. Riaz Hussain, Senior Manager, (L&CA) Pak‑Saudi Fertilizer Ltd. Muhammad Aslam, Managing Partner, Workman Associates, Pak‑Saudi Fertilizer Ltd. and Ali Murad of Workman Associates and Workman & Co. Bagging, Loading Contractors, Pak‑Saudi Fertilizers Limited, Mirpur Mathelo, District Sukkur under section 22‑A (8)(f) read with sections 15 an 53 (1‑A) of the IRO, 1969 and issued bailable warrants against them.

14. During the hearing of the appeal, respondents 1 and 3 filed objections and comments through Mr. Mahmood Abdul Ghani and a preliminary objection was raised to the effect that the appellant union was not a legally constituted trade union and had not been registered according to law. It was emphatically asserted that the allegation that Aslam Khan, Managing Partner of Workman Associates figured in every agreement was not correct and it was asserted that there was no bond of relationship of Employer and employee between Pak‑Saudi Fertilizers and the appellant Union. It was stated that it was contractor's labour. It was further denied that Workman Associates and Workman & Co. were the same concern with different names. In para 25 of the objections by respondent No.l, it was denied that the Managing Director of respondent No. 1, was personally interested in buying Pak‑Saudi Fertilizers Limited in collaboration with others, but it was admitted that in accordance with the procedure laid down by the Disinvestments and Privatization Commissions, bids were offered by "Pak‑Saudi Fertilizers Ltd. Employees buy out group". It was not specifically denied that Muhammad Rafiq, the Managing Director and Riaz Hussain the Manager of respondent No.l were associated with the buy out group. There were allegations in this statement of objections that workers had embarked on go‑slow and in this connection report of the Deputy Director Labour (R/11) was referred to. As to the settlement of 9‑3‑1992 between the appellant and respondent No. 3 Workman & Co. it was asserted that respondent No. 1 had issued letters of intent on 4‑3‑1992 and 8‑3‑1992 and it was thereafter that the settlement between Workman & Co. and the union had been arrived at. In the statement of objections and comments filed by respondent No. 3 it was admitted that the agreement between the respondents Nos. 1 and 3 was concluded on 11‑3‑1992. It was asserted that the agreement dated 9‑3‑1992 was arrived at through the efforts of Peer Ijaz Hussain of Sui Sharif and other notables because the workers of the union had been thrown out of work and approached Peer Sahib for employment with respondent No.3. It was alleged that Abdul Haq, General Secretary demanded Bhatta, which was refused and it is why he is following this litigation. Objection was taken to Workman and Co. being impleaded as a party and it was requested that this objection may be registered as a cross -objection. Muhammad Aslam Khan filed separate statement of objections and comments on behalf of workman Associates and denied that there was any relationship between him and the workman and Co. It was asserted in para 3 that Muhammad Aslam Khan had got nothing to do with Pak‑Saudi Fertilizers Company Limited except to the extent that he was Contractor for executing certain services. The record shows that Muhammad Aslam Khan, Muhammad Rizwan, Muhammad Hanif and Ali Murad signed the settlement (A/3) dated 3‑5‑1984 with the union on behalf of Shahbaz and Company. Again a settlement dated 9‑5‑1985 (A/4) between Shahbaz and Company and the union was signed by Muhammad Rizwan and Ali Murad on behalf of Shahbaz & Co. The settlement between the Union and Workman Associates dated 7‑10‑1991 bears the signatures of Muhammad Aslam Khan as Managing Partner and the signatures of Muhammad Hanif as Manager Works and in which Ali Murad was shown as Accounts Officer. It, therefore, does appear that in spite of denials by Respondents, there is some community of interest between Muhammad Aslam, Muhammad Rizwan, Muhammad Hanif and Ali Murad.

15. In reply to these objections Ghulam Sarwar, President, Peer Shah, Senior Vice‑President, Hazoor Bakhsh, Information Secretary and Muhammad Hashim, Finance Secretary of the appellant Union who were all signatories to the impugned settlement of 9‑3‑1992, filed separate rejoinders in the form of affidavits and controverted the points raised in the statement of objection and armed the allegations that they were kidnapped and their signatures were obtained under duress and pressure of Police, Rangers, Security Force, Sub Divisional Magistrate, Mirpur Mathelo, who is a friend and neighbour of Aslam Khan Contractor.

16. It may be noted that originally the appellant‑Union had moved a petition only against respondents No& 1 and 2 and later on an application under Order I, Rule 10, C.P.C. was made to the learned Member to implead Workman and Co. as a party. Since one of the contentions in the original petition was that agreement dated 9‑3‑1992 between the appellant‑Union and respondent No. 3 had been obtained under duress and by coercion and its validity had been seriously questioned, we think that respondent No. 3 was properly impleaded as a party.

17. We have heard lengthy arguments in this case. It was vehemently argued by Mr. Muhammad Shafiq Qureshi that the workers who had been affected by the act of the respondents were actually the employees of the Pak -Saudi Fertilizers Company and could not have been thrown away in the manner in which it has been done nor their terms and conditions could be changed to their detriment under the disputed agreement of 9‑3‑1992, and it was incumbent upon respondent No. 1 to make payment of all their dues to them and the introduction of the contract in this connection was a facade in order to benefit certain individuals. Ire referred to the definition of the Worker & Workman in clause (xxviii) of section 2 of the Industrial Relations Ordinance, 1969 which reads as under: ‑‑

"(xxviii) `Worker' and `Workman' means any person not falling within the definition of employer who is employed (including employment as a Supervisor or as an apprentice) in an establishment or industry for hire or reward either directly or through a contractor whether the term of employment be express or implied, and for the p4rpose of any proceeding under this Ordinance in relation to an industrial dispute includes a person who has been dismissed, discharged, retrenched, laid‑off or otherwise removed from employment in connection with or as a consequence of that dispute or whose dismissal, discharge, retrenchment, lay‑off, or removal has led to that dispute but does not include any person‑‑

(a) Who is employed mainly in a managerial or administrative capacity, or

(b) who, being employment in a. supervisory capacity draws wages exceeding rupees eight hundred per mensem or performs, either because of the nature of duties attached to the office or by reason of the power vested in him functions mainly of managerial nature."

The learned Counsel submitted that the workers attached to the union were performing an important function in the process of the manufacture of the Urea and a part of profits earned by respondent No. 1 were the direct result of the labour put in by the members of the appellant union. He particularly put emphasis on the following portion of the definition of "Worker & Workman : ‑

"Worker and Workman means, any person who is employed in any establishment or industry for hire or reward either directly or through a contractor, whether terms of the employment be express or implied." and submitted that the introduction of the contractor would not in any way affect the relationship of employer and employee which had been established between respondent No. 1 and the appellant‑Union through years and although there may not be a written contract yet by continuous practice and conduct an implied contractual relationship of employer and employee had come into being between respondent No. 1 and the appellant union in terms of clause (xxviii) of section 2 of the Industrial Relations Ordinance, 1969. Mr. Qureshi also submitted that in this case the Contractor, Workman Associates and respondent No. 1 could not be an act of collusion rescind the contract between them and throw the workers of the appellant‑Union and deprive them of the protection that the labour laws gave them. It was his contention that by lapse of time, these workers had become permanent and under Standing Order 20 of the West Pakistan Industrial and Commercial Employments (Standing Orders) Ordinance, 1968, it is the personal responsibility of the Employer to safeguard the interests of the workers, whether they are directly employed by the establishment or through the contractor. He in this connection, also referred to the definition of manufacturing process and Worker contained in section 2 of the Factories Act and urged that the process of manufacturing includes packing or otherwise treating any article or substance with a view to its use, sale, transport, delivery or disposal. He also referred to clause (h) of Section 2 of the Factories Act which says that the "Worker" means a person employed directly or through an agency whether for wages or not, in any manufacturing process"

18. In order to show that the employment of a contractor in this case did not affect the legal relationship of employer or employees between the appellant and respondent No. 1, the learned Counsel referred to various provisions of the contract (A/10) between the Contractor and the Pak‑Saudi Fertilizer Co. and submitted that actually the Company has the supervisory powers over the workers and the contactor was not a free contractor and was an agent or an overseer and the real control on the labour was that of respondent No.l. He stated that under clause 3.13 the Contractor could not negotiate with the workers union or otherwise, allow any increase in the wages or grant other benefits without the approval of the Company. The Supervisory staff of the Contractor had to be appointed after the clearance of the Company, under clause 3. It was stated with reference to clause 3.11 that the handling of machinery and use of baggage floors was to be done with the prior clearance of the Production Manager. The learned Counsel referred to clauses 6.1 to 63 of the contract and submitted that the control of the labour and Organisation of their work rests with the Officers of the Company. According to clause 7.1 the strength of the labour was not to be increased and that on Company s report for theft or indiscipline and breach of regulations, the entry of a worker was to be banned. That under clause 105 even the Contractor could be visited with a fine of Rs.5,000 if he or his Representative was found absent and if the Contractor's labour was found to accepting illegal gratification, it could be fined Rs.2,000 and removed from Company's premises.

19. Pointing out to the letter of intent (A/7) the learned counsel submitted that number of persons employed could not be increased and that same wages were to be paid as the previous employees. He said that according to this letter salary of workers was actually payable by the Company on submission of bills by the contractor plus 80% of the bill to meet labour laws liabilities including Insurance, Compensation under Workmen's Compensation Act and other medical facilities. Under clause 2.7 (A/8) no escalation in rates could be allowed in any case during the tenure of the contract. It was stated that according to clause 6 of the Letter of intent and clause 8.5 of the contract, no employer and employee relationship was to exist between the Company and the personnel of the contract, but it was asserted that notwithstanding this disavowal, impliedly, a legal relationship of employer and employee had developed between the appellant and respondent No. 1 and these loud words of disavowal were of no avail to the Company. He submitted that the employer could not be permitted to contract out of the obligations imposed on him by the labour laws. Mr. Shafiq submitted that there was deep communication between respondents 1 and 3 and no advertisement was made in the Press inviting tenders and issuance of letter of intent was a formality and a hoax in order to carry out mutually beneficial contracts.

20. In support of his contention that the workers of the appellant union were in fact to employees of respondent No. 1 and performed their duties in connection with the manufacturing process of the fertilizers, Mr. Shafiq referred to "Mukerjee Law Lexicon" which defines the `Manufacturing process' as under: ‑‑

"Making altering, repairing, ornamenting finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substances with a view to its use, sale, transport, delivery or disposal." and urged that the workers belonging to the appellants union were working in the premises of the factory in a continuing process for years and the services that they were rendering were inalienably connected with the process of manufacturing. He in this connection referred to Sindh Employees Social Security Institute v. Pakistan National Produce Ltd. (1989 PLC 81) wherein it was held by a learned Single Judge of Karachi High Court that the workers employed by the Contractor to work in connection with the manufacturing process of the industry or establishment were included in the definition of an employee as defined in clause (8) of section 2 of Provincial Employees Social Security Ordinance, 1965 (Ord. X of 1965). It was further held that the agreement between the workers and contractor was merely a cover to deprive a group of workers of their rightful emoluments, privileges and benefits. The learned Judge made a reference to the Indian Supreme Court Judgment in Hussainbhai, Calicut and Alath Factory Thozhilall Union, Calicut and others (1978 LLJ 397) where it was held : ‑

"The presence of intermediate contractors with whom alone tile workers have an immediate contractual relationship is of no consequence, when on lifting the veil, the naked truth is discovered, though draped 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 and achieve the purpose of the law and not be misled by the legal appearance'."

It was also held in the precedent case (para. 13 page 85) that in such cases the contractor was an agent or representative. The learned counsel also referred to "M/s. Basti Sugar Mills Ltd. v. Ram Ujagar and others" (AIR 1964 SC 355) wherein it was held that the crucial test to judge whether employees are the workers of the establishment is the type of work done by them in the Industry and where work is done in the industry by labour engaged by a contractor the real employer is the owner of the industry.

21. Mr. Shafiq also urged that A/23, the disputed settlement of 9‑3‑1992 (Exh. A/23) was not a settlement in the eyes of law and had not been arrived at as a result of any industrial dispute. He also urged that the settlement was not even covered by the word `otherwise' used in the definition of the word settlement under clause (xxiv) of section 2 of the Industrial. Relations Ordinance, 1969 because no real relationship of Employer and Employee was in existence between respondent No. 3 and the appellants on the day when the settlement is said to have been signed and on that day even there was no privity of contract between respondents 1 and 2. He further said that the settlement lacked the necessery element of mutual consent and even the signatories of the settlement had denounced it has having been obtained by coercion and confinement and in-fact a relationship of Employer and Employee had developed in law between the appellant and respondent No. 1.

22. Mr. Mahmood A. Ghani, learned Representative raised a preliminary question as to the maintainability of the appeal on the ground that the impugned order was not a `decision. He further stressed the point that CBA Certificate was invalid because it does not mention the establishment in which the appellant union had been registered: He further said that the appellant union was functioning in a part of the establishment and no trade union could be registered for branch of an industry. He also controverted the arguments of Mr. Shafiq Qureshi that implied relationship of Employer and Employee had developed between appellant and respondent No. 1 and he said that basic ingredients of this relationship were absent in this case. He, in this connection, cited `Mian Munir Ahmad v. The State' (1985 SCMR 257), `Farid Ahmed v. Pakistan Burmah‑Shell lid. and others' (1987 SCMR 1463) and `Punjab Small Industries Corporation v. Punjab Labour Appellate Tribunal' (1988 SCMR 1725).

23. In support of his preliminary objection that the order was not appealable, Mr. Mahmood Abdul Ghani relied upon `Mian Manzar Bashir and others v. M.A. Asghar & Co. (PLD 1978 SC 231) and `Mian Zahid Sarfraz v. Raja Nadir Pervez Khan and others' (1987 SCMR 1107/1112). Both these cases are not relevant for the interpretation of the word "Decision" as used in section 22‑D of the Industrial Relations Ordinance, 1969. in the first case, the Supreme Court was dealing with the appealability of the orders passed under West Pakistan Urban Rent Restriction Ordinance, 1959. It was held that the orders embracing the whole gamut of a dispute were appealable but Interlocutory orders either incidental or collateral were not appealable. In the above case, ex parte proceedings against the defendant were set aside for giving effect to the principles of natural justice and to the mandatory requirements of section 13(2) of giving reasonable opportunity of showing cause against ejectment. In view of the fact that this order did not finally decide the controversy, it was held as not appealable. The second case related to the interpretation of the word "Decision" under section 67 of the Representation of People Act, 1976 and it was held that the order appealed against did not fall within the ambit of section 67 and the preliminary objection raised against the competence of the appeal was upheld. Both these cases clearly do not support the arguments of Mr. Mahmood A. Ghani. The word "Decision" implies exercise of a judicial determination as the final and definite result of examinw'r18 a question. We have only to say that the order before us is a final determination of the matter of stay and the learned Member by the impugned order dated 30‑4‑1992 has finally rejected the prayer of the appellant for grant of interim relief pending the proceeding. We have, therefore, no hesitation in rejecting this convention as the application of the applicant under Regulation 32(2)(c) of the NIRC (Procedure & Functions) Regulations, 1973 stands finally disposed of by the impugned order.

24. The other objection against the registration of the union has also no force. The union was granted a certificate of CBA (A/12) by the Registrar of Trade Unions on 21‑3‑1985 and its legality has remained intact so far. Under section 9 of the Industrial Relations Ordinance, 1969, this certificate is a conclusive evidence that the trade union has been duly registered under this Ordinance. Respondents Nos. 2 and 3 have been negotiating with this union and respondents No. 1 has been negotiating for payment of salaries to the members of the union through the contractor on the basis of their settlement. They are now estopped from questioning the legality or validity of the certificate and the right of the appellants to function as CBA.

25. As to the question raised by Mr. Shafiq Qureshi in regard to the relationship of appellant and respondent No. 1 as employee and employer respectively, Mr. Mahmood A. Ghani, referred to `Mian Munir Ahmad v. The State' (1985 SCMR 257) which was a case of criminal nature and the Supreme Court decided on the facts of the case that the prosecution launched against the appellant under section 2(1) of the Schedule under section 2(g) of the Standing Orders Ordinance, 1968 for non‑issuance of ticket to the workers was mala fide. The case of the appellant in this case was that he sat in Karachi while the Factory Manager, managed the affairs at Kotri and that seasonal workers were employed through a contractor for loading and unloading. The learned counsel also referred to `Punjab Small Industries Corporation v. Punjab Labour Appellate Tribunal' (1988 SCMR 1725). The question for consideration in this case was whether the West Pakistan Industrial and Commercial Employments (Standing Orders) Ordinance, 1968 was applicable to the servants of the Punjab Small Industries Corporation and whether their retrenchment had been made according to law. The Court held that it could not be said that the Standing Orders became inapplicable to the servants of the Punjab Small Industries Corporation and on facts it observed that the abolition of the posts of the respondents therein had been made according to law. The case of `Farid Ahmad v. Pakistan Burmah‑Shell Ltd.' (1987 SCMR 1463) was also of a criminal nature. Pakistan Burmah‑Shell Limited was running a number of petrol pumps in Karachi, some of which were run through Dealers directly by the Company and others by the Contractor. Farid Ahmad appellant in this case had been employed by a contractor who was running a petrol pump and was succeeded by Mr. Saleh. Mr. Saleh terminated the services of the appellant, and the appellant filed a criminal complaint before the NIRC against Pakistan Burmah‑Shell and its officers under section 53(1) of IRO, 1969 on the ground that they had committed unfair labour practice. The NIRC entrusted the case to the Labour Court which issued summons to the accused named in the case. On writ petition having been filed in the High Court against the issuance of above process, the High Court issued the writ, An Intra‑Court appeal before the Division Bench failed. The matter came up before the Supreme Court and while dealing with clause (xxviii) of section 2 of IRO, 1969 which defines Worker and Workman, their Lordships observed as under: ‑‑

"What was intended by the legislature by this provision was to include amongst workmen or employees not only persons who have 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."

It appears that their Lordships found that Farid Ahmad did not fall within the definition of Worker or Workman because he had not been engaged by a Contractor to render services to the Company but had undertaken to run the petrol pump of the Company on his own and not to supply labour to be engaged by the Company in its industry. It may be seen that in these cases there is no dictum in regard to the matter before us i.e. whether the existence of a contractor can intervene between the benefits available to worker under the Labour Laws or whether the labour engaged through a contractor in a businesss or manufacturing concern is not in the employment of the owner of the Industry. A useful and illustrative comparison is available in the precedent case between the dealer who ran the petrol pump on behalf of the company and the contractor who carries on the same business but on his own. While the petrol pump run by dealers are manned by the workers employed by the Company and the sale proceeds belong to the company, the Contractor employees his own labour and is solely responsible for his profit and loss. His business as such has nothing to do with the company. Their Lordships have clearly brought out a distinction between these two categories of labour and have held that persons engaged by the owner or the company for the performing of any particular work or task are‑not included in the category of contractors as contemplated by the definition contained in clause (xxviii) of section 2 of the IRO, 1969. We therefore, do not accept the interpretation Mr. Mahmood A. Ghani sought to be put on this judgment of Supreme Court because that would completely erode the intention of the legislature in affording protection also to the labour supplied by the Contractor. We have noticed that Division Bench of Balochistan High Court, Quetta has held in Writ Petition No. 409/92 M/s. Euro Ceramics Ltd, v. RTU Balochistan, decided on 22‑12‑1992 that the labour engaged by the contractor can equally benefit from the remedial and beneficient provisions of the labour laws. This was a case where the registration of a Trade Union was challenged on the ground that the members of the trade union were employees of a Contractor and registration was, therefore, in violation of the provisions of the Industrial Relations Ordinance, 1969. Their Lordships observed that the definition of Worker or Workman in clause (xxviii) of section 2 of the IRO, 1969, makes it clear that a worker even if engaged through contractor would be deemed to be a worker in the establishment provided the nature of his job is to remain engaged in the affairs of the establishment, but if the contractor has been engaged for undertaking a work other than the job being carried out in the establishment, the worker enganged by him would not be deemed to be a worker of the establishment. It was further observed: ‑

"We are bound to draw the conclusion that contractor whosever, he may be had engaged the labour not for doing the job other than which is being carried out in the factory. In view of this conclusion, inference can also be drawn that actually the device adopted by the petitioner in raising the plea that the members of the union are not the employees of the organisation, has been done with a view to deprive them from their legitimate right of forming the trade union."

26. We respectfully agree with this and venture to observe that a Statute should be interpreted so as to give effect to the public policy as laid down by the Legislature for protection of the workers.

We may also say that in assessing the status of a worker as an employee of the establishment or industry, the following questions may also be relevant:‑

Is the work required to be performed by the workman of continuous and permanent nature and is related to the process of manufacturing before finished goods are sent into market,

Since how long the service is to be rendered and whether the payment of emoluments is made from the coffers of the Company.

Whether the goods when marketed bring back the sale proceeds to the treasury of the company itself, and

Since how long a worker has been performing his duties, and putting in the labour in connection with the manufacturing process.

27. We would have ordinarily not given finding on the question of relationship of respondent No. 1 and the appellants because the question before us is whether the appellant had prima facie case or not and whether the learned Member passed the impugned order in consonance with the principles of dispensation of discretionary relief. We however, find that the learned Member has given a categorical finding on this aspect of the case. We quote from him: ‑‑

"Nor M/s. Pak‑Saudi Fertilizers Company Ltd. appears to be responsible to make payment of wages to them; there being no relationship of employer and employee between them."

The case has also been argued before us by both sides on the assumption that the above question has to be dealt with by us finally and we had not been requested to refrain from giving a final decision in the matter and leaving in question to the learned Member to reconsider his opinion. We also feel that if the learned Member has given a categorical opinion which requires to be set aside, it is our duty as Appellate Bench to correct the same and state the law and express the view which we deem to be correct. A final expression on this aspect of this case is also called for to avoid the multiplicity of proceedings and we feel that we are called upon to record a final opinion in this matter.

28. Now coming to the impugned order, we see that the learned Member took note of the fact that the respondents Nos. 1 and 2 had agreed on 8‑3‑1992 (Vide A/22) to cancel the agreement between them but he further did not take notice of the fact that this agreement had been followed by a settlement on 7‑10‑1991 (A/12) between the appellant‑Union and respondent No. 2 and the real beneficiaries of the contract rescinded by respondent No. 1 were the workers of the union and it was actually the workers who had been hit by the recession of this contract. If that contract had not been concluded, there would not have been any subsequent settlement between the union and respondent No. 2. There were number of facts before the learned Member which could have presuaded him to maintain the order that he passed in the first instance. The allegation before him was that 193 workers had been locked‑out on 22‑2‑1992 on the pretext of closing the mill for one day for repairs. The further fact was that respondents Nos. 1 and 2 had, in complete disregard of the interest of the workers, rescinded the contract unilaterally without caring for the fact that settlement between the union and the respondent No. 2 had been arrived at on the basis of that contract, and that Labour Laws afforded protection equally to the labour engaged by the contractor. The legality of the contract dated 9‑3‑1992 had been squarely questioned before him and there were documents on the record to indicate that the case of the union from the very start was that some of its office‑holders had been confined and coerced into signing the new contract, which was apparently to the detriment of the workers belonging to the union. There was a diminution of about Rs.700 p.m. in the emoluments per worker and that 112 workers had been locked‑out under the terms of this contract. Keeping in view the normal course of human conduct the union could not have been a willing party to such a contract.

29. We also feel that the learned Member has not taken into account the element of balance of inconvenience and irreparable injury. The appellants had come to the Court on the allegation that they had in the near past been consistently persecuted by acts of unfair labour practice detailed in the petition and bad made out a prima facie case for investigation, In these circumstances, the first order passed by the learned Member on 15‑3‑1992 was quite in accord with the principles governing the grant of discretionary relief at an interim stage. The exercise of discretions means to follow a better course. In our opinion, the confirmation of the interim order would have been a better course for the learned Member. The refusal to confirm the stay order on 30‑4‑1992. Practically left the appellants without relief, which they so eagerly sought. The members of the union had worked and rendered service to Pak -Saudi Fertilizers Co. consistently for a number of years whatever the complexion of the contractor. They were performing important functions in the industry without which the process of manufacture could not have been complete and commodity could not have become marketable. The type of work they put in was continuous and permanent in nature was indispensible and directly related to the completion of the process of manufacture in the industry. These workers were not stray job hunters. They had spent substantial part of their lifetime in the service of the industry. They could not be thrown away as respondents Nos. 1 and 2 contrived to do, disregarding their obligations under the IRO, 1969, the Factory Act, 1934 and Standing Orders Ordinance, 1968.

30. The vacation of stay order in this case resulted in the disturbance of status quo which under the circumstances was necessary to maintain in view of the factual and legal matters raised before the learned Member. Respondents 1 and 2 had bound themselves by a contract between themselves to make payment to the workers on stipulated rates and on this basis a settlement had been concluded between the appellants and respondent No. 2 which was to continue till 27‑1‑1993 with the concurrence of respondent No. 1. The vacation of stay order meant to leave the workers in lurch without any surety of payment of remuneration at the agreed rate to them for the labour that they were still performing in the establishment of respondent No. 1. The grant of injunction is a form of equitable relief and is in aid of equity and justice to be administered on the facts of each case. The discretion has to be exercised in accordance with reason and on sound judicial principles after looking at all the circumstances of a case. The aim should have been to prevent the continuation of the injury complained of as the appellants had come to Court with the complaint that their terms and conditions had been changed unilaterally by collusion between respondents and that they were being coerced into accepting a settlement which they disowned and which was apparently against their interest. The question of irreparable loss or injury and balance of convenience are inter‑related and in the present case what graver and irreparable injury could be caused to a worker than forcing him to face the prospect of being thrown out of job or drastic reduction in his emoluments and what greater disturbance of balance of convenience could be there than the anguish and the pain caused to him because of the effect that he and his children will be denuded of the source of subsistence and exposed to the inclemency of the weather without proper apparel or other necessities of life. This would be in clear violation of the objects of the legislature in enacting laws for the protection of labour. In interpreting the labour laws, we have to take into consideration the human element, which is the main source of such beneficient measures. We have to make an effort to advance the remedy and prevent the mischief.

31. The case of the appellant was that in the implementation of the policy of privatisation, they had demanded that they should be kept at par with other workers of the factory in the other departments. It was also alleged that Muhammad Rafiq, Riaz Hussain and others intended to show reduction in the expenses of the factory and it was in order to achieve that object that an illegal lock out of 193 workers was effected on 22‑2‑1992 and on 8‑3‑1992 the officers of the appellant union were confined and pressurized into signing the agreement (A/23) which was against their interest as a result of which 112 workers had thrown out of work. In these circumstances, the learned Member should have addressed himself to the question whether the acts complained of did not prima facie establish a case of unfair labour practice.

32. A reference to relevant labour laws leaves no doubt that the legislative intent is not to make any distinction between workers employed directly or through a contractor. According to clause (xxviii) of section 2 of the Industrial Relations Ordinance, 1969 Worker or Workman is a person employed in an establishment or industry for hire or reward either directly or through a contractor, whether the term of employment be express or implied ...........

33. According to clause (h) of section 2 of the Factories Act, 1934 as amended by Act XVI of 1973, `Worker' means a person employed directly or through an Agency in any manufacturing process or in cleaning any part of the machinery or premises used for manufacturing process or in any other kind of work whatsoever, incidental to or connected with the subject of the manufacturing process. Again under West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (VI of 1968) which was promulgated with the object of consolidating the law relating to industrial employment, the legislative dictate is clear and unambiguous that the provisions of this Ordinance cover all workmen of an establishment whether or not they are employed through contractor and the Employer of the Establishment has been personally held for their observance. Standing Order 20 of the Ordinance reads as under: ‑‑

"20. Liability of employer: ‑ ‑The employer of the industrial and commercial establishment shall personally be held responsible for the proper and faithful observance of the Standing Orders. Whether or not the workman of such establishment are employed through contractors."

The legislative intent is, therefore, clear that beneficient provisions of the labour laws will equally be applicable to all workers in an establishment whether they are recruited directly or through a contractor in any manufacturing or commercial establishment. Burden, therefore, lies heavily on the person who claims to the contrary to show that labour employed through contractor in a particular establishment does not fall within the ambit of these legislative directives and is outside the protective territory so carefully and so assiduously defined by the legislature. We have held above that the duties performed by the members of the appellant union in the departments of bagging, stitching, transport etc. are directly connected with the process of manufacturing going on in the establishment of respondent No. 1. We have also seen that the emoluments of these workers were paid by respondent No. 1 on the basis of the bills submitted by the contractor and an additional sum of 80% was paid in connection with the legal charges payable under various labour laws. The payment of dues of the workers was, therefore, made by respondent No. 1 albeit through a contractor. By cancellation of the contract, the liaison between the contractor and the respondent No. 1 had disappeared and respondent No.1 becomes legally and morally liable to pay the emoluments of the workers.

34. We therefore, allow this appeal and set aside the order dated 30‑4‑1992 passed by the learned Member at Karachi, vacating the earlier ad interim injunction issued by him and direct Respondent No. 1 to pay the emoluments of the members of the union working on its premises from 8‑3‑1992 till 27‑1‑1993 the date on which the contract (Exh. A/10) between respondents Nos. 1 and 2 and the settlement between respondent No. 2 and the appellant‑Union (Exh. A/12) were to expire. This payment is however, subject to adjustment of the amounts already paid during hearing of this case. If contractual system has not been resumed since 27‑1‑1993 the respondent No. 1 shall continue to pay the emoluments to the appellants subject to the final order of the Single Bench.

We find that in the original application a prayer was made that the lock‑out resorted to with effect from 22‑2‑1992 and the other consequences resulting from the agreement dated 9‑3‑1992 be declared as illegal and dealt with as unfair labour practice. The learned Member will now consolidate and consider the question of removal of the workers since 20‑2‑1992 in the establishment of Pak‑Saudi Fertilizers Co. and decide the same in the light of the provisions of the Factories Act, 1934, West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 and the Industrial Relations Ordinance, 1969 and other Statutes connected with labour.

35. We would also request the learned Member at Karachi to hear this case from day to day as it involves the determination of the terms and conditions of large number of workers.

H.B.T./193/NIRC

Appeal allowed.