Messrs AL-KARAM TEXTILE MILLS(PVT.) LIMITED, KARACHI vs MUHAMMAD
This matter concerns an appeal filed by Al-Karam Textile Mills against the reinstatement of eleven workers whose services were terminated without notice or written order. The core legal question was whether the appellant Mill or the labour contractor was responsible for the observance of the Standing Orders Ordinance, 1968, regarding these workers. The Labour Appellate Tribunal held that because the Mill retained control over the Weaving Department—managing the unit, supplying raw materials, and providing utilities—the contractor was merely a supplier of labour rather than an independent lessee of the unit. Consequently, under Section 20 of the Standing Orders Ordinance, 1968, the Mill remained the employer responsible for statutory compliance. The Tribunal affirmed the Labour Court's finding that the termination violated Section 12(3) of the Standing Orders Ordinance, 1968, as it was effected orally without written reasons or notice. The Tribunal upheld the order for reinstatement with back benefits, establishing the principle that where an establishment retains operational control, it cannot evade statutory employer obligations by engaging workers through labour contractors.
- Is an establishment responsible for the observance of the Standing Orders Ordinance, 1968, when workers are supplied through a labour contractor but the establishment retains operational control?
- Does the termination of a worker's service without a written order violate Section 12(3) of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968?
- Under what circumstances does a labour contractor become responsible for the observance of the Standing Orders Ordinance, 1968, instead of the establishment?
- Section 12(3), West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968
- Section 20, West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968
DECISION Heard Mr. Ch. M. Latif Saghar for the appellants. The 11 workers against whom these appeals have been filed by Al-Karam Textile Mills were working in the Mills in various capacities in the Weaving Department of Al-Karam Textile Mills. Their service had been procured through a contractor but it was a labour contract only and the Unit of the Mill had not been given on contract basis. The Weaving Master of the appellant was Incharge of this Unit. He was responsible for supply of raw material and other services like I electricity, water, gas, telephone etc. The contractor only supplied the Labour and he was not responsible for the profits and losses. Therefore, under section 20 of the Standing Orders Ordinance, 1968 the employer i.e, Al-Karam Textile Mills remained responsible for the observance of Standing Orders applicable to the workers and not the contractor.
2. The appellant Mill became displeased with the respondent workers as they claimed the same benefits as in the case of other workers employed directly. The appellant Mill terminated their services without any notice and without any order in writing giving reasons for the termination as required under section 12(3) of the Standing Orders. They accordingly served grievance notice and filed their grievance petitions before the Fourth Sindh Labour Court, Karachi. The Labour Court found that this was a clear violation of section 12(3) of the Standing Orders and since they were jobless, the Labour Court directed their reinstatement with all the back benefits. The appellant Textile Mills being dissatisfied with the order of Labour Court have preferred these appeals.
3. Mr. Ch. M. Latif Saghar for the appellants has argued that the contractors themselves were responsible for the observance of the Regulations of the Standing Orders and not the appellants as owners of the Mill. He has cited a number of rulings on this point. The trend of all these decisions is that where Unit itself is leased out to the contractors for running the same and for a payment to the owners the contractor would be responsible for the observance of the Standing Orders etc; but where the owners of the Mill also managed the Unit themselves through their own officers and supplied the raw materials and the service etc; the Standing Orders were to be implemented by the owners themselves and they should not rely on the contractors. This should be in accordance with Order 20 of the Standing Orders Ordinance. The establishment and not the contractor is to be held responsible for the proper observance of Standing Orders even though the workers are employed through the contractors.
4. The 11 respondents whose services were terminated orally were therefore rightly ordered to be reinstated with payment of back benefits. There was no order in writing nor any reason nor any notice of termination was e issued by the management. The contractors were not the Managers.
They were merely contractors for supply of labour.
5. Under the circumstances I find no merit in these appeals which are dismissed in limine.
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