Ch. MUHAMMAD ASHRAF and others vs STATE LIFE INSURANCE and others
This civil petition for leave to appeal arose from the judgment of the Federal Service Tribunal dismissing appeals filed by Area Managers of the State Life Insurance Corporation whose services were terminated for alleged unsatisfactory performance and failure to achieve required business targets. The core legal questions were whether the petitioners were contract employees whose services could be summarily terminated, and whether their termination complied with the State Life Employees (Service) Regulations, 1973. The Supreme Court of Pakistan observed that the Tribunal incorrectly dismissed the appeals on the assumption that the petitioners were contract employees, failing to examine the case on its merits. The Court noted that the appointment letters did not show employment on a contract basis and contained no explicit terms requiring achievement of a specific business target. Furthermore, Regulation Part II Section 4 prescribed specific review mechanisms by the Board for underperformance. Consequently, the Supreme Court granted leave to appeal to examine whether the termination orders complied with the applicable service regulations and terms of appointment.
- Whether employees governed by specific service regulations can be treated as contract employees and terminated without recourse to those regulations?
- Whether the termination of an Area Manager for failure to achieve business targets is lawful if such a condition is not specified in the appointment letter or prescribed by the Board under the relevant regulations?
- Whether the Federal Service Tribunal is required to decide service appeals on the merits rather than assuming employment is contractual?
- 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 require 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 petitioners 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.