MUHAMMAD ASHRAF Versus STATE LIFE INSURANCE
This matter concerns civil petitions for leave to appeal against a judgment of the Federal Service Tribunal, which dismissed the petitioners' appeals against the termination of their services as Area Managers by the State Life Insurance Corporation. The core legal question is whether the petitioners, who were terminated for unsatisfactory performance regarding business targets, were contract employees subject to summary termination, or whether their employment was governed by the State Life Employees (Service) Regulations, 1973, which prescribe specific procedures for performance review and disciplinary action. The Supreme Court observed that the Tribunal erred in assuming the petitioners were contract employees without examining the merits of their appointment letters or the applicable regulations. The Court held that the termination orders were potentially invalid as they lacked reference to specific Board decisions required by the regulations for performance-based action. Consequently, leave to appeal was granted to further examine whether the termination complied with the prescribed regulatory framework, establishing the principle that service termination must strictly adhere to the governing statutory regulations rather than administrative discretion.
- Can the services of an Area Manager be terminated for unsatisfactory performance without adherence to the specific procedures prescribed by the State Life Employees (Service) Regulations, 1973?
- Does the Federal Service Tribunal err in law by dismissing an appeal on the assumption of contract employment without reviewing the actual terms of appointment and governing regulations?
- Are Area Managers under the State Life Employees (Service) Regulations, 1973, considered contract employees subject to summary termination?
- Part II Section 4, State Life Employees (Service) Regulations 1973
ORDER
MUNIR A. SHEIKH, J.‑ ‑‑By this common order we propose to decide above civil petitions involving identical questions of law and fact.
2. Services of the petitioners, who were Area Managers in State Life Insurance Corporation, were terminated on account of unsatisfactory performance for not achieving the requisite amount of business in terms of money, which orders were challenged before the Federal Service Tribunal by filing appeals, which have been dismissed through the impugned judgment dated 6‑2‑2001, against which leave to appeal is sought.
3. It appears that Federal Service Tribunal dismissed the appeals on the simple ground that the petitioners were not permanent employees and their services could be terminated as contract employees, if their performance was found to be unsatisfactory.
4. Learned counsel for the petitioners referred to State Life Employees (Service) Regulations, 1973 made by the respondents, in particular, Part II section 4 of the said Regulations, which provides as under:‑‑
Ordinary basis.‑‑‑(b) An Area Manager on ordinary basis shall draw a fixed pay of Rs.1,000 per month plus a special incentive bonus of such amount and on exceeding such performance standards as may be prescribed by the Board from time to time.
(c)(1) An Area Manager shall be required to meet such performance standards regarding new business, persistency and other operational factors as the Board may prescribe from time to time.
(2) The performance of an Area Manager shall be reviewed by, the General Manager on a six monthly basis or for such shorter periods as may be deemed necessary by the Board.
If on such review it is found that his performance falls short of the prescribed standards, such measures including, but nor limited to, reduction curtailment or withdrawal of his emoluments or perquisites or all such measures together, shall be taken by the General Manager as may be general or specifically prescribed by the Board.
5. It was contended that services of the petitioners could not be terminated at the whims of the officers whereas this Regulation requires that such action can be taken which may be prescribed generally and specially by the Board and respondents had not referred to any decision made by the Board for taking action against an Area Manager in such circumstances. We have also examined appointment letters of the petitioners as Area Managers and found that it was not an appointment on contract basis whereas the order of dismissal from service was made on the basis of terms and conditions of their appointment which did not contain any condition for achievement of business of a particular amount.
6. Federal Service Tribunal, therefore, appears to have failed to consider the case of the petitioner on merits on the assumption that they were contract employees.
7. Leave is granted to further examine the case in the light of submissions made above.
S.AK./M‑353/S Leave granted.